Derek Bestreich of IPRG, Sean Mashihi and Gabriel Kates of Block Real Estate Group (Getty, IPRG, Block Real Estate Group)

“Private Wedding Photos” is not a good filename for a single employee to hide stolen company data.

It’s one of the revelations in a lawsuit filed by a New York brokerage and consulting firm accusing four former employees of stealing company secrets and soliciting colleagues for their own startup.

Investment Property Realty Group filed a federal lawsuit in Manhattan on Thursday against a quartet of former employees and Block Real Estate Group, accusing them of taking confidential information and luring colleagues in violation of agreements they had signed.

IPRG was itself a startup founded by a broker who left a bigger company. Derek Bestreich launched it as Bestreich Realty Group in 2016, the same month he left Marcus & Millichap after seven years, according to his LinkedIn page. His website says he oversees 20 brokers who have sold more than 450 properties for more than $2 billion.

According to the complaint, two former brokers, Sean Mashihi and Gabriel Kates, formed Block Real Estate Group in May while the couple were still employed at IPRG. The lawsuit says that before leaving the company this summer, Mashihi and Kates conspired with fellow broker Daniel Shawah and data analyst Serge Sarkisian to obtain market information from the database of the company.

Mashihi and Kates reportedly used the information and the prospect of higher commissions to recruit colleagues from IPRG to join them in their new venture. IPRG employees are required to sign confidentiality agreements that prohibit the disclosure of company information and investments and prohibit former workers from retaining such data after they leave the company, according to the lawsuit.

Former employees are also prohibited from soliciting colleagues for one year after their departure.

The IPRG said the ‘underground scheme’ came to light this month after an internal investigation into the company’s software revealed that Mashihi and Kates allegedly conspired with Shawah and Sarkisian to download and steal data from company in order to start their own business and actively sought to conceal it, according to the complaint.

The investigation revealed “unauthorized and unusual” exports from the database and that information had been downloaded from company computers. Salesforce’s audit logs showed “an unlawful scheme to build their competing business on information stolen from IPRG,” according to the suit.

Uploads reportedly occurred in June before Mashihi and Kates left the company, as well as twice in September and once this month before Shawah left. The downloaded files would have been exported to a jump drive to get the information beyond the company’s reach. For security reasons, brokers are not allowed to store private information outside of the company’s network, according to the complaint.

The most recent alleged act took place this month, just hours before Shawah announced his departure from the company, according to data records.

Sarkisian, who was responsible for maintaining the database and organizing the data for use on marketing materials, was allegedly approached by Shawah and downloaded various databases from the system to a USB stick and another computer. Shawah sought to cover up the action by placing the documents in a folder labeled “Private Wedding Photos” and deleting the files and reports from the computer and Salesforce, according to the lawsuit.

When confronted, Sarkisian admitted that Mashihi, Kates and Shawah asked him before they left to email them information about the company from the database, according to the complaint.

An investigation of Sarkisian’s wedding photo file found no wedding pictures, and that Sarkisian “is not married and lives at home with his parents”. Sarkisian was fired this month and was allegedly paid $5,000 by the defendants for the stolen data, according to the complaint.

Since leaving IPRG, Mashihi and Kates have reportedly tried to recruit former colleagues to join them at Block Real Estate Group, according to interviews and a review of company records by IPRG. The company also accused Block Real Estate Group of using the stolen data to market and sell properties.

The IPRG sent cease and desist letters to the defendants, giving them until last Tuesday to respond. They didn’t, prompting the lawsuit.

IPRG is seeking at least $6 million in damages for defendants’ alleged breach of the Defense of Trade Secrets Act of 2016. The brokerage sought a restraining order to restrain the defendants from using stolen company information, recruiting company employees and destroying confidential data.

However, the request was denied, according to Mashihi and Kates’ attorney Eddie Wipper. A hearing is scheduled for November.

The attorney said his clients “intend to further vindicate themselves against these allegations, which they vehemently deny.”

Lawyers representing the IPRG declined to comment on the litigation. Shawah’s attorney also declined to comment. Lawyers representing Sarkissian had yet to respond when asked to comment.